French MVNO Prixtel has launched an ad-supported service under a new brand, Blu, according to a news report. The new MVNO is offered via a smartphone app which is available (albeit in a beta version) on Google Play and enables users to order a free SIM and then track the benefits accumulated on a point-based system.

The LTE service, which operates on SFR’s network, offers free calls, texts and data in exchange for viewing advertising, referring other users to Blu and downloading recommended apps.

Tarifica’s Take

We find this to be an unusual and innovative approach to the MVNO market, and possibly a harbinger of things to come. Offering a full range of mobile services completely free of charge while deriving revenue entirely from mobile advertising is certainly radical, and while we, of course, have no idea whether it will be sustainable for Prixtel in this particular case, it raises some issues well worth thinking about.

As we have written, MVNO brands targeted at low-budget (or, in this case, no-budget) users have generally done best with the youth market, a rapidly growing and extremely valuable demographic for mobile operators of all kinds. One of the salient traits of the youth population is that its members, as so-called “digital natives,” tend to expect that internet-based content be available without charge and are therefore quite accepting of the viewing of ads as a means of financing this availability. Therefore, extending this principle, they will likely find the presence of ads in Blu no stumbling block to the enjoyment of the free service.

With the explosion of increasingly sophisticated, algorithm-driven ads that can be tailored to users’ habits, mobile advertising is clearly going to become a more and more significant revenue source in the mobile telecom sphere worldwide. Ad-supported apps already exist in vast numbers; it may only be a matter of time before ad-supported mobile services become common, as well.